Sydney-based Mason Stevens will today announce the appointment of former BT Investment Management portfolio manager Jack Chemello as head of equities. Mr Chemello will join after a break from the markets, which included a one-year sabbatical from BT.

The hire is an important plank of Mason’s strategy following a merger with 2020 Funds Management.

But there has been a flurry of activity in this space in recent months, with former UBS asset management operative Simon Shields among those setting up a fund.

Mr Chemello, who has more than 16 years experience in investment management, joins Mr Handley, a former finance director at Westpac, Mason Stevens’s founder Thomas Bignill, and former Commonwealth Bank of Australia global markets and treasury operative Vincent Hua, who is now chief investment officer at Mason.

“A lot of people talk about it, but these guys are actually doing it,” Mr Chemello said, referring to growth stemming from a multi-asset class strategy targeting wealthy individuals, self-managed super funds and family offices, both directly and via financial planning partners. Mr Chemello said Australian fund managers had to adapt to the current environment for equities, as returns from traditional strategies were likely to remain low for some time.

“If you look at the investment strategies out there, there is a significant amount of obsolescence in them,” he said. The new fund will target monthly returns of 1 per cent with less volatility than the index.

Mason’s funds under management and administration swelled to more than $550 million from about $400 million at the time of the merger in March.

Support from retail investors for absolute return strategies have been somewhat constrained after the global financial crisis.

Mason’s Australian equities long-short fund will be 100 per cent equities, with a “bottom up” research approach. The key differentiation will be investment by pairing of stocks within a sector and capitalising on differences in their business models.

“What it really comes down to is the ability to identify, and arbitrage and extract returns from the pairing,” Mr Chemello said.